updated 01:40 pm EDT, Tue August 18, 2009

Slim PS3 Official

Sony today confirmed the existence of the slim PlayStation 3. The new console is built on smaller, cooler Cell and RSX processors and as a result shrinks in size by exactly a third and sheds 36 percent of its weight. It further gets a larger 120GB hard drive without sacrificing the existing features of the PS3, including Blu-ray, two USB ports and built-in Wi-Fi.

The console should be available in every territory that already has the PS3 within the first week of September. In the interim, the 80GB model will see its price drop to $299 effective Wednesday. No word has been given as to cuts for the 160GB model, though retailers are already showing it dropping a similar amount to $399.

Sony's redesign comes at a crucial moment for the company, whose sales have only worsened in the past year as the price gap has widened between the PS3 and the Xbox 360. Much of the price reduction has been made possible by 70 percent lower build costs that now mean Sony can sell a $299 PS3 while still generating a profit, an important concern for a company that posted its first annual loss in more than a decade and has said it needs to make its businesses profitable.